The top 3 challenges facing direct to consumer retailers (D2C)
Last updated May 2, 2019
Here’s a common scenario: Someone starts waking up every day feeling like a zombie; they begin to liken their once comfy mattress to a medieval torture device. Overwhelmed by what to do, they take to social media to crowdsource mattress recommendations. And, overwhelmingly, the votes are for a buzzy new online retailer—rave reviews from dozens of actual friends.
Unfortunately, when that buzzy new mattress arrives, it’s a nightmare. The rave reviews of others do not a good night’s sleep make.
The crazy thing? A week later, this customer leaves the retailer a glowing review of their own, that had nothing to do with the hell mattress.
The promise of a hassle-free return struck our hero as too good to be true, and she prayed this mattress would work out. She approached customer support with dread. To her surprise, within about 48 hours, someone was at her door to reclaim the mattress, and a full refund arrived within a week. “No hard feelings,” said the mattress company. “Thanks for giving us a try.”
The whole experience was delightful—and this customer didn’t even like the product.
Simplicity and ease. These things are at the heart of the direct to consumer, or D2C, revolution. So are minimalism and quality, a tightly curated selection, and no storefront, even for unwieldy purchases like that mattress. These bold, direct ideas have utterly transformed how Americans and people the world over make purchases. A May 2018 Inc. feature cited 400-plus startups that had raised roughly $3 billion in venture capital since 2012.
And the rest of the retail world has been catching on. Although D2C started with scrappy visionaries like Warby Parker, Dollar Shave Club, Peloton, a whole different — more traditional — type of business has been inspired by the approach, like Stanley Black and Decker, which has expanded its e-commerce presence, or outright adopted it, like Nike. And one of those D2C trailblazers, Dollar Shave Club, was acquired for $1B by Unilever in 2016. More and more companies, in fields as disparate as clothing, sporting goods, and cars (REI, Under Armour, Tesla), have realized they don’t have to create a new category of product (BarkBox, Soylent) or revolutionize an existing one (Harry’s, Allbirds) to benefit from a more direct relationship with their customers.
Inc. reported on two themes in their reporting: “One, nearly every product category will see at least one D2C challenger. And two, largely because of that proliferation, it’s harder than ever to build a big, profitable business with the Warby model.” The renegades are arguably now the standard. But grand-scale success will take ever more work and innovation — and extraordinary customer service.
Customers have an expectation of seamless service across channels. It doesn’t matter if you’re a D2C upstart fresh off your Series B funding round or an industry lion: Your customers are comparing you to the best customer experience they’ve ever had—every time. The consequences are far-reaching. Direct-to-consumer businesses have evolved a specific set of needs as they scale and continue to innovate. Read on for key challenges facing D2C businesses and how Zendesk helps solve them.
You have to control your CRM data
Customer data is less of a stream and more of a flood, and it’s roaring in across multiple systems and applications. This is nothing but positive, if your business has the power to properly handle all this data. But customer data is more scattered than ever before. Being able to manage it, make sense of it, and interpret it at a high level, however, are all crucial for understanding your customers and ideally being able to proactively identify the opportunities to better serve and even delight them.
Traditional CRM platforms have promised a 360-degree view of the customer for decades, but that’s very hard to achieve when you are working with proprietary systems, rigid databases or siloed customer data. With the Zendesk platform, on the other hand, companies have the flexibility they need to create a full view of their customers by unifying data sources, consolidating interaction history and building customer applications. Many of Zendesk’s most successful customers use APIs and build custom integrations. In conjunction with the Zendesk Professional Services team, Dollar Shave Club created a custom “Telepath” app that integrates with Zendesk, allowing agents to see member information that includes past orders and tracking information. “It’s important to us that every third party app we use integrates with Zendesk,” said Hoerman. This confers many benefits—reduced number of screens, less chair swiveling, faster first-response times, greater CSAT from customers not having to repeat themselves, more personal customer experiences—and Zendesk has improved the way companies can work with all the tools that are right for them.
Zendesk Sunshine, our new CRM platform, is open and flexible: Businesses can connect and understand all their customer data in any format, wherever it lives. Sunshine delivers the freedom to select your favorite developer tools; the resulting connected view of the customer experience provides visibility across profiles, events, and objects. It’s customizable technology that can shed light on the unique experiences of your particular customers.
How you handle transactions can be make-or-break
Some retailers see shipping and delivery as solely utilitarian. These are probably not the most successful ones. In reality, how you handle this process can be a big indicator of your commitment to your customers and how well you relate to their needs. In Differentiating delivery: How to win the e-commerce battle, Accenture reports that two-thirds of consumers have chosen one retailer over another simply on the basis of delivery options. And 40% of consumers in the Walker Sands 2018 Future of Retail Study said the availability of next-day shipping is a big motivator. As business heats up for D2C retailers, understanding where the company’s goods are and having the ability to impact shipments—for instance, to consolidate and track—are critical for a great customer experience. And on the flip side, a company must have a smooth, fluid returns process, which means being on top of every aspect of a return. Some companies work with partners to optimize the returns and shipping portions of their work, but it’s crucial that the partners be on brand, to ensure seamlessness. When is something coming back? How much of it? And where is it at any given time? These kinds of transactions can make up the vast majority of support cases for a D2C business.
Having a dynamic view of the entire order lifecycle, from transaction to delivery, is a must. With Sunshine, businesses can now store their entire product catalog and track every event related to an order such as shipping, delivery, returns, and re-purchasing. This gives agents complete insight into which products are related to a support ticket and where a customer is in their order lifecycle.
For those businesses who want to give their support teams unprecedented visibility into a customers’ products, order history, and subscription plans—all from a single workspace—Sunshine makes it possible to manage product subscriptions and warranties, as well as to help deliver context to agents in real time. This in turn makes a more personalized support experience possible.
For instance, a customer has trouble updating their subscription—perhaps they want to upgrade or downgrade. They’ve searched the help center but can’t figure out how. Before, agents would spend valuable minutes logging into another app, asking the customer to verify their information in a separate, disparate system, and then go on to make the update. Now, however, agents can update it on the fly within the context of the ticket in ZD Support.
You need a comprehensive picture of your customer
Seamless omnichannel service is now the standard. But what are the long-term effects of meeting your customer’s needs, interaction to interaction? Do good interactions have the same long-term impact as negative interactions? The 2018 Zendesk Customer Service Survey Report said that for 97% of respondents, bad customer service changes buying behavior, and for 87%, good customer service changed buying behavior. Developing a multidimensional picture of how information like this plays out in the real journeys of your customers is a must.
When building a comprehensive view of a customer’s journey, a historical timeline of their digital and in-person interactions is helpful. This could include their web and mobile activity, email opens, and in-store check-ins. With Zendesk Sunshine, a company can combine attributes from internal sources and third-party applications and link them to a single user identity. The Sunshine Events feature lets businesses capture every interaction–like shopping cart, web, or mobile activity—to better understand how customers engage with your brand across the entire customer journey.
By connecting various touchpoints, a support ticket can display information about the customer’s VIP level, loyalty status, or the account size. That information can be critical for providing personalized service in-line with the customer’s expectations. But when you have recorded data of the entire customer journey, it can benefit an entire organization, not just support. Customer data can be synced across the company to be used for marketing campaigns, sales opportunities, and incoming orders. It’s an opportunity for keeping everyone on the same page regarding their customers. The result: a better understanding of who your customers are and what they might want from you.
Direct to consumer businesses face unique challenges as the revolution they started keeps changing retail—and the playing field they themselves built. Any rules that D2C might have created are shifting constantly as competition intensifies and traditional players, some with outsize resources, get in on the game. Understanding the key challenges for this arena and using the best tools to address them is foundational to success.